Mubasher: Oil futures climbed on Thursday, paring some of the steep losses incurred in the prior session on a continuous build in US crude stockpiles and worries about lower demand growth, Reuters reported.
By 7:02 am GMT, US Nymex crude futures rose by 2.68% to $52.51 per barrel (pb), while global benchmark Brent futures jumped by 2.97% to $61.75 pb.
On Wednesday, Nymex crude plunged by 4% to $51.14 pb, the lowest recorded since 14 January, while Brent dropped by 3.7% to $59.97 pb, the lowest hit since 28 January.
A build in US crude inventories, coupled with the country’s high oil output, have boosted a bearish sentiment among market participants, Interfax Global Energy analytics head Abhishek Kumar was cited by Reuters.
The Energy Information Administration (EIA) reported that the US commercial crude inventories rose surprisingly for the second week in a row, gaining 2.2 million barrels to 485.5 million barrels, the highest level since July 2017.
Moreover, the EIA slashed its forecast for this year’s global oil consumption, prompting hedge funds to exit oil positions at the fastest rate since the fourth quarter last year as their worries mounted over the global economic performance.
An escalating trade conflict between the US and China, the world’s two top crude consumers led most analysts and banks to lower their demand growth projections.
The uncertain macroeconomic picture could prompt the Organization of the Petroleum Exporting Countries (OPEC) to extend their output restraints agreed on with allied producers, including Russia.
The so-called OPEC+ alliance has been withholding oil supply by 1.2 million barrels per day (bpd) to shore up prices.
The producer club could meet by the end of this month or early next.
“The recent declines seen in oil prices strengthen the case for a continuation of the output-cut agreement,” Interfax’s Kumar was quoted by Reuters.
While officials from OPEC already indicated a consensus among members to extend the curbs, Algeria proposed raising the reductions, the news agency cited four sources familiar with the matter.